The Kenya Revenue Authority allows Kenyan citizens to file their taxes annually from 31st Dec to 30th June. After this period lapse, anyone that did not file his or her taxes must pay a fine or penalty as applicable to their income. Even with the fines, you will still have to file your taxes to avoid further charges. You can pay these fines directly to KRA offices, or via MPESA. This is a short guide on how to use MPESA to clear any KRA penalties.
What is the penalty for late tax filing?
If you have a recorded source of income, the penalty of late filing is usually 5% of your expected tax payment. For those without claimed revenue, a total charge of Ksh. 2000 stands as the standard penalty amount. Sometimes KRA charges whichever is higher between the 5% of tax or Ksh 2000. With delayed payment, you will have to pay a penalty of 5% of the tax owed with an additional 1% interest rate per month, until the time you pay the tax in full.
Other KRA Tax Penalties
- Value Added Tax (VAT). This is the tax charged on the importation and supply of taxable goods and services made or brought into Kenya. The penalty of late filing on VAT is the higher of Ksh 10,000 and 5% of the owed tax. Penalty for late payment of the fine, results to a total of 5% of tax owed and an interest rate of 1% per month up until you clear all payments.
- If you do not deduct, account for, or submit a certificate of PAYE as requested, you stand to pay a penalty of whichever is higher between 25% of the tax or Ksh. 10000.
- Failure to pay your tax on the due date attracts a fine of 20% of the tax involved.
- A fine of Ksh 2000 on any KRA-Pin
- Late or failed payments of Stamp Duty attracts a penalty of 5% of the owed tax, every quarter year, from the date of the instrument.
- Not deducting or paying Withholding tax can attract a 10% fine with the maximum limit of Ksh. 1million.
How to Pay KRA Penalties and Fines via MPESA
- Log into your KRA account.
- Find the ‘Payment Registration’ tab and follow the instructions.
- Fill in the details required carefully, and then download the generated electronic slip. The slip will have your payment registration number. This is what you will use as the account number during the MPESA payment.
- Now go to your MPESA app and choose ‘Lipa na MPESA’ followed by ‘Pay bill.’
- For the business number enter 572572, followed by the payment registration number as the account number.
- Put in the due amount followed by your MPESA pin, and after counterchecking the details, send the payment. MPESA and KRA will both send confirmation messages for the received payment.
How to Pay Individual Income Tax via MPESA
After filing your returns on iTax, you will get a generated electronic slip with a payment registration number at the top right corner. You can either present the slip to any of the acceptable KRA partnered banks, or follow the steps above to pay via MPESA.